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PricewaterhouseCoopers criticised in Landsbanki crash report

A report on behalf of Iceland’s Special Prosecutor into the banking crisis says that the Icesave debt upon the Icelandic state would have been massively lower had PricewaterhouseCoopers, Landsbanki’s external auditing company, done its job properly.

According to the report’s Norwegian main author, if PricewaterhouseCoopers had been honest in its reporting of Landsbanki, the bank would have lost its operating licence no later than the end of 2007.

Among other things, the report criticises the auditors for not having flagged up the so-called Icelandic Affair. The Icelandic Group took massive loans from Landsbanki and was allowed to continue borrowing after it became apparent the company would have difficulty servicing its debts. Icelandic Group was saved from being put on Landsbanki’s defaulters’ list by a EUR 40 million loan from Grettir ehf. Grettir ehf. in fact got the 40 million directly from Landsbanki and all three companies involved were owned by Bjorgolfur Gudmundsson. . . 10-Dec-10.